Citigroup will cut hundreds of jobs, make name change

Citigroup will cut between 500 and 600 U.S. jobs in its consumer-lending arm to make the company more attractive to prospective buyers, officials said Tuesday. 

CitiFinancial will close 330 branches in 48 states and shut down 46 branches, cutting another 120 jobs in Canada, about 6.4 percent of the unit's staffs in the two countries, Mary McDowell, CEO of the division, said in an interview. 

The U.S. businesses of CitiFinancial will be renamed after a reorganization that will split CitiFinancial in two, one for personal, home equity and refinancing loans and the other for expanded support including loan modifications and restructuring. The new brand will be unveiled later this year, McDowell said. 

The branch cuts “should provide a lot more clarity in terms of potential buyers looking at the full-service network branches, and being able to grow that segment,” she said in a release Tuesday. “We think it does increase the salability and eventually the fundability, because whoever buys CitiFinancial will need to fund it.”

Citi split into two segments last year, Citicorp and Citi Holdings, of which CitiFinancial is a part. 

CEO Vikram Pandit has been trying to sell off the components of Citi Holdings — which had $547 billion in assets at the end of last year — since January 2009, shortly after receiving a $45 billion bailout in 2008.

Citigroup repaid $20 billion in bailout funds in December and converted the remaining $25 billion into stock, which gives the Treasury Department a 27 percent ownership stake in the company. 

The U.S. division will still have 1,321 full-service branches, with CitiFinancial expecting to keep at least one full-service branch or servicing center in every state, McDowell said.